Argentina's Mileise: Argentines bought a fifth less at food and drink stores in December, report finds
Sales of basic goods such as food, medicine and gasoline dropped significantly in December compared with the previous year, reports have found. This came in a month during which newly-inaugurated President Javier Milei’s administration devalued the peso by a record 54%.
Retail sales dropped by an average of 13.7% year-on-year in December, according to the Argentine Confederation of Medium-Sized Companies (CAME); for all of 2023 real sales fell 3.4%.
Sales at food and drinks stores were down by a fifth (19.8%) in what is normally a strong month as households stock up for Christmas and New Year. That sector was followed by pharmacies (-19%) and hardware and construction materials stores (-14.2%).
Retail sales were impacted by both a spike in inflation - which doubled to 21.1% monthly in Buenos Aires alone - as well as a sudden labor market downturn: Unemployment - which reached a 36-year low of 5.7% in the third quarter - is now expected to reach double digits as reports of layoffs mount.
Bleak outlook
The Argentine Dealerships Association (ACARA) reported a 10.2% growth in new vehicle registrations for all of 2023 - but a 6.2% drop in December.
“We now see a market of 340,000 by 2024 (a 25% plunge), although we may also have to adjust that number downwards again in the coming months,” ACARA president Sebastián Beato lamented.
Construction materials sales likewise fell 17.4% year-on-year in December, according to the latest report by the construction association Construya. Most of that decline took place in December, with their “Construya” Index showing a 14.8% drop compared to November.
“This is a consequence of the uncertainty associated with the change in government, and is likely to go on during the summer,” the Construya report noted.
Shop owners surveyed by CAME said the drop in sales was unexpected, linking it with price increases and shortages of certain products. “[Sales] were restricted to the bare minimum,” a hardware store owner from the northern city of Santiago del Estero told CAME.
“If they don’t revive, we won’t be able to keep going.”
At: https://buenosairesherald.com/economics/argentines-bought-a-fifth-less-at-food-and-drink-stores-in-december-report-finds
Argentines protest high prices - as well as far-right President Javier Milei's high-handed decrees - in the city of La Plata recently.
Milei's record one-day devaluation of 118% just after taking office a month ago has sent already-high inflation soaring to 200% and rising - while a barrage of austerity and deregulation decrees has prompted a deep recession and a wave of layoffs.
Social aid organizations are bracing for what they believe could be a repeat of the country's well-publicized 2002 debacle - when unemployment exceeded 20% and income poverty, 54%.
